Culture as a Management Tool for Medical Groups

Discover how a medical group’s culture can affect patient care and safety, and learn how changing a culture can be very difficult.

Efforts to improve the performance of medical group practices, and especially those focused on reducing variance in costs and quality often identify the practice culture as a major factor.1-4

Yet surprisingly little is known about these cultures and how they influence physician behavior. There are several reasons for this disparity.

First, while culture as a social construct has a rich heritage in anthropology and sociology, the concept of organizational cultures is less well articulated and the application to medical practices is just starting to take place.5-7  Second, there is little information available regarding the relative influence of the various components of organizational cultures on performance. For example, while there are good theoretical arguments suggesting that cohesive practice cultures that place a high value on quality of care will have less variability in their care patterns and fewer patient care errors, the empirical data supporting those theories are thin.

However, several recent studies focused on the cultures of medical practices and hospitals provide insights that help give form to this elusive concept,

What is organizational culture?

The concept of organizational culture can be traced to the 1970s. During that period, organizations began to be conceptualized as cultures rather than impersonal, mechanistic entitles. However, it wasn't until the 1980s that the field of organizational culture became popularized and entered the language and constructs of managers.8

Peters and Waterman's best-seller, In Search of Excellence, played a key role in this process in that they linked organizational excellence to the ability to create a strong unifying culture with a shared vision. Parallel research conducted by Deal and Kennedy and reprinted in their book, Corporate Cultures,10 further elaborated this concept and proposed that the success of organizations is not ultimately dependent on the rational aspects of managing, but rather by the organization's culture − the inner values, rites, rituals and heroes.

The "New Law of the Business Life," they argued, is that strong cultures make for highly successful companies. Strong cultures are systems of informal rules that guide employee behavior toward some shared goal.

Of all the researchers that have studied organizational cultures, Edgar Schein is arguably the most influential, mainly because he articulated a clear conceptual framework for analyzing these entities.11

He viewed culture as an integrating mechanism, a social or normative glue that holds together a potentially diverse group of organizational members. A main characteristic of this paradigm is that it considers leaders as cultural members. As such, culture offers a key to managerial control, work commitment and organizational effectiveness.

It is a mistake to believe that the practice culture can change in the short run to accommodate a new physician who doesn't fit.

Schein further advanced the concept of cultures as a management tool by exploring how cultures are formed and how they can be changed, He noted that unless organizational cultures are considered, it is not possible to understand why organizations do some of the things they do and why leaders have some of the difficulties they have.

He defined culture as "a pattern of basic assumptions − invented, discovered or developed by a given group as it learns to cope with its problems of external adaptation and internal integration − that has worked well enough to be considered valid, and therefore to be taught to new members as the correct way to perceive, think and feel in relation to these problems."

Measuring Culture

One of the earliest attempts to measure organizational culture employed a competing values framework.12, 13 This approach identified four culture types:  group, developmental, rational and hierarchical.

The group culture focuses on teamwork, cohesiveness and participation, with emphasis placed on commitment and morale, mentoring, and rewarding team players.

The developmental culture emphasizes innovation and risk-taking and is oriented toward growth. Support is given for entrepreneurial leaders, and rewards are granted for risk-taking and sharing.

The rational culture is characterized by achievement and meeting objectives. Acquiring the necessary resources to achieve organizational goals is highly rewarded in this type of culture.

Finally, the hierarchical culture stresses stability, rules, policies and regulations. Support is given for leaders to achieve predictability in operations, and rewards are granted for adhering to rules and regulations.

In 1986, Reynolds, an organizational psychologist at the University of Minnesota, reviewed these competing models and identified 12 cultural dimensions that were prominent across most models that successfully differentiated types of organizations.14

In addition to successfully integrating and further defining the concepts related to organizational cultures, Reynolds demonstrated that the resulting instrument successfully identified key differences between private sector vs. public sector organizations. Consequently, his work provided an important starting point for work in the health care field.

However, it wasn't until the late 1980s that the growing industrial interest in organizational cultures spread to health care. Much of the early work in this setting focused on hospitals and the nursing profession. A study of 42 ICUs conducted by Shortell and colleagues found that a team-satisfaction culture among nurses was positively associated with performance outcomes.15

Following this, Zimmerman and others examined nine ICUs and concluded that high-performing ones had a team-satisfaction culture that is patient-centered. The main characteristics of this culture are focus on excellence in patient care, empowerment of nurses, strong educational programs, liberal use of rewards and ceremonies, high sense of collegiality and visible leadership.16, 17

One of the major issues identified by these researchers is that the statements used in the industrial sector to measure cultural dimensions may not effectively capture the cultures of highly professional health care organizations. These same issues were apparent when cultural studies were extended to the medical group practice field.18

In response to these measurement issues, we developed a cultural instrument specifically designed to assess cultures of the medical group practices, documented the important characteristics of these cultures and demonstrated that they influence the performance of the practices.19

Following this development, several studies using this instrument have shown promising results. In a study of 118 medical groups in the Upper Midwest, Curoe and colleagues found that practice cultures vary by practice type and size and that they provide important practice defining characteristics.20

More recently, the research conducted by Smalarz not only confirmed the measurement variables and the cultural attributes, but also demonstrated that they influence quality of care. She found that practice cultures with strong organizational identities had higher quality of care in an environment where all of the practices used clinical guidelines and had similar economic incentives.21

It is difficult to manage patient care when there is wide disagreement among clinicians about norms of behavior.

Her findings and the findings from a study of drug errors conducted by Kralewski and colleagues also found that cultures with strong professional commitments had better quality performance. However, a later study of patient satisfaction found that this cultural dimension had a negative effect on satisfaction while a cohesive culture had a positive influence.

Finally, a study conducted by Kaissi adds a new dimension to our thinking about the influence of practice cultures on performance. It demonstrated that the “fit” between the culture of a medical group practice and the practice structure is an important factor determining the provision of high-quality care.22

The findings of this study support the hypotheses that some structural programs are only effective in reduced medication error rates in group practices that have specific cultural characteristics.

For example, practice guidelines and benchmarking are associated with reduced medication error rates only in group practices that have a more collegial culture. A similar relationship exists between standardization structures and cultures that emphasize quality.

Practice guidelines had a strong association with reducing medication errors in group practices that emphasize quality and valued information. In group practices that lack this cultural attribute, either these programs are resisted by the physicians, or they are accepted but not adequately used.

Benchmarking methodologies and clinical practice guidelines need to co-exist with a collegial organizational culture that emphasizes quality. Since cultures tend to be hard to change, this means that structures intended to improve performance in a given area, such as quality or cost efficiency, should be designed to fit the practice culture.

Acceptance and use of care management practice improvement programs by the physicians after adoption by the practice is a growing concern and the practice culture clearly influences these use rates.

A study of primary care group practices that adopted electronic prescribing technologies found that the practice culture was the most important factor influencing use rates by the physicians.23

Culture as a Management Tool

Together these studies provide insights into how medical group practice cultures can be used as a management tool. It is clear that these practice forms have organizational cultures that can be measured, provide an important aspect of the practice identity and influence performance. As such, the practice culture is an important ingredient in strategy formation, program implementation and performance management.

For example, cultural compatibility is essential in any plan to add physicians or nurse practitioners to the practice or to merge with or buy other groups, or to develop satellite clinics. The dislocation costs caused by lost productivity and staff turnover when a practice with a vastly different culture is acquired can be avoided if the cultures of both practices are clearly identified in advance and differences resolved during the exploration stages.

Similarly, the economic, social and legal costs of hiring a physician who doesn't fit the practice culture can be avoided if the practice culture is identified in advance and the recruited physicians are asked to consider that distribution of values.

It is a mistake to believe that the practice culture can change in the short run to accommodate a new physician who doesn't fit, and it is equally a mistake to believe that the new physician will adapt to the practice culture if he or she embraces a conflicting set of values and practices.

At a different level of group practice management, the practice culture clearly is an important factor influencing a broad range of quality and economic activities and furnishes an important internal management tool. It is clear from the research conducted by Curoe, Kralewski and Smalarz that cultures vary across practices and within practices.

In other words, Practice A and Practice B have similar cultures but in Practice A there might be a high degree of agreement among the clinicians on the culture while in Practice B there might be a wide range of perspectives.

Consequently, an important first step in the use of practice cultures as a management tool is to identify both the characteristics of the culture and the degree of agreement on those characteristics.

The assessment of the practice culture should include physicians, nurses, and support staff, and to get accurate information, it must be anonymous. The results provide the basic data needed to initiate discussions about the practice culture and to identify areas of disagreement.

Some medical groups use regularly scheduled staff meetings to discuss the resulting data while others distribute the data to the physicians and then use a retreat format with an external moderator for the discussions. These discussions serve two purposes.

First and often for the first time, the physicians become acquainted with the fact that there is an identifiable organizational culture in their practice and that others may view their values and work norms in a less than totally favorable light.

Second, this exercise causes physicians to confront their own views about the practice culture and to clarify their values regarding what the organization stands for and how they want to work together to achieve their personal and professional goals.

In other words, this serves to clarify the values of the clinicians and this often leads to a convergence of perspectives. This exercise creates an awareness of the culture as an important aspect of the practice and helps solidify the perspectives about what that culture should be. As such, it provides an excellent team building experience and creates an organizational “us” versus “me” orientation among the clinicians.

While group practices can survive with considerable disagreement among the physicians or the physicians and nurses about their practice culture, the challenges faced in the evolving health care system will make it increasingly difficult to meet performance standards while protecting the bottom line when these disagreements prevail.

It is difficult to manage patient care in a cost-effective way when there is wide disagreement among the clinicians about values and norms of behavior. Similarly, the practice will find it difficult to successfully meet the pay-for-performance challenges under these circumstances.

Consequently, if major differences persist after the assessment and discussion exercise, the outliers will need to reconsider their positions or seek employment with a different organization.

Creating awareness of the practice culture and discussion among the clinicians and support staff is an important first step in shaping a culture that supports high-quality, cost-effective care.

The second step is to shape a culture that supports these desirable performance outcomes. While there is still a great deal of uncertainty about these relationships, some basic management principles can serve as guides.

If a practice has a culture that values individual physician autonomy and little loyalty to the practice organization, it will be difficult to implement innovations such as electronic health records. In fact, there is evidence that these cultural conditions are the reason why some practices adopt EHRs and can't get all of the physicians to use the system.

It is not unusual for group practices to have a third of their physicians continuing to use paper medical records three years after installing the electronic system. Needless to say, maintaining this two-system approach does not improve the bottom line.

Adopting and effectively using clinical guidelines follows a similar pattern, although in this case the concept of organizational “fit” identified by Kaissi also makes a difference. Quality improvement, cost containment and similar programs will only be effective if they fit with the practice culture and the culture places a high value on quality of care. As a result, it is important to know the culture before selecting the type of program to adopt.

So, what does this mean to group practice managers? First, culture matters and can be an important management tool if properly used to improve the performance of the practice.

Second, practice cultures are complex and multifaceted, and cannot be easily determined without some formal measurement effort.

Third, there are two dimensions to a practice culture; the attributes such as cohesiveness and open information exchange, and the degree of agreement on those attributes. A culture assessment exercise with open discussion of the results will narrow the disagreement as clinicians clarify their own values and see merit in the values and norms expressed by others.

Fourth, some differences in cultural perspectives can be successfully managed, but the best performing practices will be those that have resolved these differences and have a high degree of appreciation on a well-defined culture that enhances open flow of information and team effort.

Finally, it is important to develop programs that fit the practice culture. Hiring nurse practitioners will only be effective if the culture supports this sharing of the clinical roles and acquiring a practice without exploring the cultural fit risks decreased productivity in both practices, high turnover of key personnel and possibly failure of what could have been a successful strategic initiative.

While the economic performance of medical group practices will remain an important consideration during the next decade, the quality of care will likely take center stage.

Widespread concern over clinical errors and efforts by health insurance plans to shift enrollees to higher quality practices and pay them on a quality performance basis presents one of the most important challenges faced by medical group practice leadership.

While several safety culture survey instruments are being developed, practices will be better served by efforts focused on the overall practice culture that identifies the underlying values that influence a broad range of activities, including quality of care and patient safety.

For example, if a practice has a culture that doesn't value information technology or comparative clinical data, doesn't have an agreed upon approach to clinical care and doesn't have a high level of identification with or trust of the practice organization, error rates can be expected to be high and, more importantly, no one will know about it until a tragic event occurs.

Changing a Culture

When planning for culture change, managers need to find ways to incorporate new elements into prevalent ideologies and cultural forms such as symbols and customs. The process is often resisted by those people inside the organization, mainly because culture change brings losses as well as possible gains. Therefore, successful culture change entails convincing at least a majority that likely gains outweigh the losses.

There are three culture change approaches in organizations:24

  • Revolutionary and comprehensive efforts to change the culture of the entire organization.
  • Efforts confined largely to changing specific subcultures within the organization.
  • Efforts that are gradual and incremental, but nevertheless cumulate in a comprehensive reshaping of an entire organization's culture.

In large medical groups, cultural assessment and then change might be focused on one department, such as the walk-in clinic or the surgical services, if those units are having performance problems.

In smaller groups or larger practices, facing a crisis situation, the change may have to be revolutionary. One such practice included in a previous managed care study projected that it could not continue to maintain a positive bottom line financial performance unless it dramatically changed its practice culture that was formed during a generous fee-­for-service payment era.

Efforts to create a cohesive culture with a cost-effective practice style met with significant resistance, and to make the change, nearly one-quarter of the physicians left the practice.

While at times this may be the only way to deal with a cultural change, in most cases practices will be well served by a gradual and incremental change that starts with a clear understanding of the current culture and the degree of agreement on that culture.

John E. Kralewski, PhD, is o professor in the Division of Health Policy and Management at the School of Public Health at the University of Minnesota in Minneapolis.

Amer Kaissi, PhD, is an assistant professor in the Division of Health Policy and Management at the School of Public Health at the University of Minnesota in Minneapolis.

Bryan E. Dowd, PhD, is a professor in the Division of Health Policy and Management at the School of Public Health at the University of Minnesota in Minneapolis.


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